LATE WITNESS EVIDENCE AND WITNESS CREDIBILITY IN THE INTELLECTUAL PROPERTY & ENTERPRISE COURT: HANDED OVER ON A PLATE?

The Intellectual Property Enterprise Court is likely to be a model of good practice. Basically designed to ensure the SMEs can protect their intellectual property rights without going broke in the process it has a fairly robust approach to procedure and evidence. This can be seen in Bodo Sperlein Ltd -v- Sabichi Limited. [2015] EWHC 1242 (IPEC).

THE CASE

The claimant brought an action alleging that the defendant alleging breach of copyright in a Red Berry design. The defendants alleged that theirs was a design made independently of the claimant’s work.

IPEC: THE BEST BIT

However the best part of the judgments are the pictures. The court makes full use of technology to ensure that diagrams and photos are included in the judgment. More laid back readers can “cheat” and look at the pictures first to see if they can guess the outcome.

Are these two designs the same? *

LATE SERVICE OF EVIDENCE

“Late applications to introduce further evidence

On the first morning of the trial both sides applied to introduce further evidence. BSL sought to file a fourth witness statement from Mr Sperlein. BSL’s solicitors had by chance discovered an entry in the ‘Linked In’ website for a ‘Jenna Backwell’ who had worked at Sabichi Homewares as a designer from August 2006 to September 2008. As I have mentioned, Sabichi’s evidence referred to Ms Adams’ assistant as ‘Jenna Blackwell’, a name that rang no bells with Mr Sperlein. However, following the finding of the Linked In entry for Jenna Backwell, he searched the company’s computer system and discovered that Ms Backwell had applied to BSL for a job in February 2010. The job application had been kept and it referred to Ms Backwell’s time at Sabichi Homewares. It said this in response to a question on the job application form about her research techniques:

“I’ve always enjoyed researching and am very thorough. As a designer I produced five seasons of trend stories, which involved producing image boards and trend packs with descriptions. The research always started with a stimulating visual trip to Maison & Objet in Paris (homewares trade show) and meetings with trend prediction companies to see their books. Comp shows in London and lots of magazines and photocopying. The internet is always a wonderful up to date source but by no means the be all and end all.”

Ms Backwell withdrew her job application to BSL, but the point that Mr Sperlein wished to make was that Ms Backwell had revealed an interest in what was displayed at Maison et Objet, that this will have included the 2006 trade show which occurred while she was employed by Sabichi as assistant to Ms Adams, and that the Red Berry collection had been featured at the 2006 show – and other years following its launch in 2002. Mr Sperlein’s point was that this was evidence of a clear opportunity for Ms Adams to have become aware of the Red Berry collection in around 2006.

For its part Sabichi’s application on the first day of the trial was to file further documents by way of disclosure and to use them in evidence. These documents were five further A3 pages showing Twiggy designs. I was told by Mr Cunningham on instructions that they were preparatory designs created by Ms Adams leading to the final Twiggy designs which had already been disclosed.

It will be rare that late applications to file additional evidence will be allowed in the IPEC. Mr Hall referred me to the helpful guidance given by Peter Smith J in relation to late evidence in Nottinghamshire and City of Nottingham Fire Authority v Gladman[2011] EWHC 1918 (Ch); [2011] I WLR 3235. All factors must be taken into account including in particular whether the opposing party is in a position to deal with the evidence. These considerations are relevant in the IPEC but CPR 63.23(2) must also be observed. This states that save in exceptional circumstances the court will not permit a party to submit material in addition to that ordered at the CMC. That is a hurdle which applies in addition to the matters which must be taken into account in the rest of the High Court.

I allowed BSL’s application, first because there had been no reasonable opportunity to file the evidence earlier than it did, secondly because the delay in filing it was caused by Sabichi’s mistake in their evidence, thirdly because Sabichi could deal with the point in cross-examination and last because the evidence was on its face clearly relevant to one of the principal issues before the court.

I was more doubtful about allowing Sabichi’s application. There is always an ongoing obligation to give disclosure of documents in those categories ordered at the CMC so I had no objection to their being served on BSL. However Sabichi wanted to do more than just disclose these further Twiggy designs, they wished to alter their case on the creation of the Red Blossom design by reference to the new documents. The only reason given for the lateness in relying on the extra Twiggy drawings was a mistake on the part of Sabichi or their solicitors. That is no good reason at all. In the end I allowed Sabichi to rely on the new designs because they appeared to be highly relevant, in one direction or the other. I directed Sabichi to serve a further witness statement from Ms Adams on the evening of the first day of the trial to explain the further documents and put them properly in evidence. I also imposed a condition that Ms Adams had to return on the second day of the trial for further cross-examination so that BSL could properly deal with the new evidence.”

ASSESSMENT OF THE WITNESS EVIDENCE

The IPEC, like many other courts, had to assess the evidence of the witnesses. This is another example of the total intransigence of a witness leading a judge to doubt their reliability.

“The witnesses

Mr Sperlein appeared for his company. I found him to be an honest witness. Mr Cunningham rightly made no criticism of him.

I think Ms Adams was on the whole trying to give her evidence accurately. But I had the impression that she was conscious of what Sabichi were trying to establish and was willing to overstate parts of her evidence because she thought it would help Sabichi’s case. For instance, while she did not deny that circumstances had provided the opportunity for her to see the Red Berry design, she was completely adamant that she had never seen it. I find it hard to believe how anyone not blessed with a photographic memory – Ms Adams did not claim that – could be certain that among the huge number of designs seen and presumably the many forgotten in the last 10 years or so, the Red Berry design could absolutely not be among them. I think it is possible that Ms Adams thought or had been told that if she admitted even the possibility of having seen the Red Berry design she would be letting the side down. This cast some doubt on her complete reliability as a witness.

Mr Bagga was not a satisfactory witness. His evidence was shown to be contradictory and unreliable on a number of counts. In relation to the profit made by Sabichi on sales of the Red Blossom ceramics Mr Bagga annexed to his first witness statement a spreadsheet dealing with the gross profits made by the two Sabichi companies from trade in the Red Blossom products, the costs incurred and thus the deductions to be made from gross profits when calculating relevant net profits. Among the costs Sabichi relied on in Mr Bagga’s evidence were (i) VAT paid in relation to the Red Blossom products – even though the companies are registered for VAT which means, as Mr Bagga freely acknowledged in cross-examination, the VAT will have been recovered from HMRC, (ii) an anti-dumping duty levied by the European Union on imports of ceramics from China – although he conceded in cross-examination that this duty had not yet been imposed by the European Commission at the time the Red Blossom products were imported into the EU and (iii) a 2% inspection fee although, when Mr Bagga was reminded of the relevant purchase order, he admitted there had been no charge for inspection as shown on the purchase order. He suggested that an organisation different to the one referred to on the purchase order charged something for quality inspection. Mr Bagga was remarkably indifferent about whether his evidence was accurate or not.”

THE RESULT

“Whether the Red Berry work was copied in substantial part

A comparison between the Red Berry work created by Mr Sperlein and the design on the Red Blossom ceramics leaves me in no doubt that Mr Sperlein’s design was copied in substantial part. Mr Cunningham did not submit otherwise if I were to find that there has been copying.

It follows that Sabichi infringed BSL’s copyright by the importation into the United Kingdom of Blossom ceramics and the sale here of those products.”

* I have done this partly because this morning several QCs were complaining that there are not enough pictures on the blog.